Monday, August 2, 2010

Over the last year, we have seen a barrel of oil sell anywhere from under $50 to about $140 a barrel. A gallon of gas from $2.40 to almost $4 or more in different parts of the US. The only real reason your electric bill has not been all over the place as well is that electric utility companies are legal monopolies and thus are managed by the government. These monopolies have to request rate hikes and show a need before they can raise their price for power sold to you and me.

Many factors exist today that will put serious pressure on these prices. Those of us who work in this space have no doubt that these prices will be heading up and staying there. Cost of production and diminishing resources aside, there is mounting global pressure to add cost to fuel sources that exact higher costs to society - carbon taxes, cap and trade and feed in tariffs already widely exist around the globe and are here to stay. The US is likely to have their own before the end of 2010, or shortly thereafter, which will increase prices to all of us immediately.

When homeowners and businesses consider renewable energy options, they are usually already sold on the fact that doing so is in the best interest of our planet and our country. Having to depend on other countries for the bulk of your supply to generate power is a tenuous position. Many of these countries have political differences with the US and much of the rest of developed world. If they all got together and decided to act in unison, they could provide a great deal of pain to any country that needs their fuel if they wanted to exercise their position. Many of us remember the last oil embargo and the long lines to fill your car with fuel. In addition, regardless of your political persuasion, few people today disagree that the increased use of fossil fuels to our planet is affecting us negatively in many ways. Greenhouse gases, gulf oils spills, strip mining, nuclear waste are all real concerns.

The only real consideration is the cost of these systems in relation to the savings they will offset once installed and generating electricity. Until 2010, these numbers kept all but those with money whose main concern is the environment out of the market. Everything changed this year. The introduction of the federal stimulus program, The American Recovery and Reinvestment Act, ARRA, with the 30% cash back tax credit along with aggressive depreciation schedules (MACRS - Modified Accelerated Cost Recovery System), have brought the financials into the range for both homeowners and businesses to consider.

In addition, many states have added their own stimulus funding to sweeten the pot and even many of the utilities have started to add dollars to the decision as they are being forced to come up with certain percentages of their electrical production be clean renewable in s few short years. Depending on where you live, these funding sources can combine to make buying a solar Photo Voltaic system an absolute no brainer. Even if somehow magically electric rates stayed the same it is a good decision. As these rates go up, it becomes a GREAT decision.

With that being said, the solar PV market is still a relatively young market prone to inventory shortages and delays. Since these stimulus funds always have dates associated, a widespread "awakening" in the US could easily leave those who want to unable to participate as they just got into the game too late. Finally, we all remember cash for clunkers....for those who took action it was a great deal. Then the rules changed as all government programs are prone to do.

All factors point to the same place. Even if you have limited funds, the numbers are good enough to attract investors who may be in a position to buy these systems for you with you receiving some reward now and a deeply discounted system a few years down the road.

It is not often that the numbers, the government, the country and the planet are all saying the same thing... are you listening?

Steve Peters manages a solar solutions blog at http://www.solarsolutionscenter.com and is President of a commercial solar design and installation company, Life Cycle Building Group, http://www.lifecyclebuildinggroup.com